MGI(SH:688114) Haitong Securities International·2025-11-03 11:36Investment Rating - The report maintains an "Outperform" rating for the company, with a target price of RMB 75.81 based on a 2025 PS of 11X [4][10]. Core Insights - The company achieved revenue of RMB 1.87 billion in the first three quarters of 2025, showing a slight decrease of 0.01% year-on-year, while net profit attributable to shareholders improved, reducing losses by RMB 343 million to RMB -120 million [4][10]. - As of September 30, 2025, the company had cash reserves of RMB 2.19 billion, a decrease of RMB 427 million from June 30, 2025 [4][10]. - In Q3 2025, the company reported revenue of RMB 755 million, reflecting a growth of 14.45% year-on-year, with net profit attributable to shareholders at RMB -16 million, indicating continued loss reduction [4][11]. - The company effectively controlled its expense ratios, with a gross profit margin of 54.01% (down 4.37 percentage points), and reductions in sales, general and administrative, and R&D expense ratios [4][12]. - The company holds a significant number of patents, with 640 domestic and 492 foreign effective patents, totaling 1,132 effective authorized patents as of September 30, 2025 [4][13]. Financial Summary - Total revenue projections for the upcoming years are as follows: RMB 2.87 billion in 2025, RMB 3.33 billion in 2026, and RMB 3.78 billion in 2027, with respective growth rates of -4.7%, 16.1%, and 13.5% [3]. - The net profit attributable to shareholders is projected to improve significantly from RMB -146 million in 2025 to RMB 151 million in 2027, reflecting a growth rate of 1,538.4% [3]. - The company’s return on equity (ROE) is expected to turn positive by 2027, reaching 1.9% [3].